Guide To Donating Cars To Charity Organizations

If one is considering donating cars to charity organizations, it is a humanitarian act. It is a unique way of helping people from the deprived section of society. There are thousands of individuals who can benefit from the car charitable organizations. Hence, more and more people are encouraged to donate cars. When an individual donates his/her car to a charity, he/she can have the tax reduction benefits, which can be a huge relief for tons of taxpayers.

Finding the right charity organization

Finding the right charity organization for car donation is the foremost step. It is recommended to avoid profitable intermediary organizations that advertise handling and managing car donation processes. It is always better to find an organization that directly accepts car donations and other transactions. This assures that 100% of the profit lies with the charity that one is donating. Moreover, it is suggested that one must research the available car donation programs and select a convenient one.

Utilizing FMV for the car

One must consider using FMV (Fair Market Value) for the car intended for donation. It is usually used when:

  • The charity organization keeps the car and uses it instead of selling it
  • The charity initiates all kinds of enhancements before selling the car
  • The donated car is sold at a discounted price to an individual with a low income
  • When the vehicle donated has worth less than $500

Apart from the above-mentioned situations, one can deduct the amount that the organization sells the vehicle at an auction as mentioned on the written receipt that the charity organization sends the donor.

The charity organization must be a 501 (c) (3)

Several organizations claim to have non-profit status. When one intends to donate cars, the charity organization must be a 501 (c) (3). Such charity organizations are tax-deductible, which means that the donor can seek tax benefits. This is also one of the reasons why several people intend to donate their cars and different kinds of vehicles to charity organizations. The 501 (c) (3) public charity status is the prime aspect that should be considered while donating cars.

Maintaining a proper and complete paperwork

When one considers donating their car, maintaining complete and proper paperwork is important. For instance, if a car is valued at over $250, the donor needs to obtain a written acknowledgment from the charity organization. Moreover, when the donated car is valued at more than $500, the donor needs to fill up Section A of IRS Form 8283 and attach it with the yearly taxes. Similarly, if the intended vehicle is valued at over $5000, the owner must possess an independent appraisal and complete Section B of IRS Form 8283.


One might come across several charity organizations on the internet dealing with car donations. But every charity doesn’t hold the 501 (c) (3) public status, which is necessary for tax deductions. Furthermore, when a person wants to donate cars, he/she must be vigilant enough to execute complete and proper paperwork and have an acknowledgment for car donation.

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